Vasuda Capital Management raises corporate governance issues at Inotek Pharmaceuticals
As we expected, our demand for inspection of documents regarding Inotek's discussions with its financial advisor regarding 'strategic alternatives' (which is legal under Delaware shareholder rights) was denied. We are preparing our response to this communication.
By denying Inotek shareholders our rights, the Inotek management has proven that its interests are not aligned with those of the shareholders.
We have also found other violations of corporate governance at Inotek. For example, The Board of Directors appointed Dale Ritter (CFO) as the Compliance Officer to oversee that the Code of Good Business Ethics is followed. This is a conflict of interest since Mr. Ritter belongs to the management and is likely to act in the interests of the management, rather than the shareholders (which are represented by the Board).
CEO Mr. Southwell appointed Mr. Timothy Barberich as an 'Independent' Board Director in September 2016. Mr. Barberich co-founded Sepracor and was its CEO/Chairman. Mr. Southwell helped in Sepracor IPO during his employment at Lehman Brothers. Subsequently, Mr. Southwell joined Sepracor as CFO. Mr. Southwell and Mr. Barberich are well familiar with each other. We object to Mr. Barberich's appointment as 'Independent' Board Director since he is likely to act in the interests of Mr. Southwell (who represents Inotek management), rather than that of Inotek shareholders.
Mr. Paul Howes, an 'Independent' Board Director worked earlier as Inotek's CEO and President, a position that he no longer holds. He is well familiar with Mr. Rudolf Baumgartner (who was Inotek's Chief Medical Officer during Mr. Howes term as its CEO). We object to Mr. Howes appointment as an Independent Board Director since he is likely to act in the interests of Inotek management, rather than that of Inotek shareholders.
Mr. J. Martin Carroll, Chairman of Inotek's Board is responsible for representing the interests of Inotek shareholders before the management. However, by overlooking above mentioned good corporate governance violations (or even knowingly participating in it), Mr. Carroll has failed in his fiduciary duty towards Inotek shareholders.
We ask Inotek Board Chairman to look into these issues.
Bhavneesh Sharma, Vasuda Capital Management